Executive compensation is crucial for several reasons:
1. Attracting Talent: Competitive compensation packages are essential to attract top-tier talent in a competitive market. 2. Retention: Retaining experienced and effective leaders is vital for the continuity and success of a business. 3. Motivation: Properly structured compensation packages can motivate executives to align their efforts with the company's strategic goals. 4. Performance Alignment: By tying compensation to performance metrics, companies ensure that executives are working towards the long-term success of the organization.